Class Actions

Short-Subway-Sandwich Settlement Stupid, Says Seventh Circuit

Subway sandwich (not to scale)

August 28, 2017

What’s so appealing about alliteration? I really have no idea, and yet I just spent maybe 10 minutes trying to come up with a headline using it. Who cares? And now it’s bothering me that “circuit” doesn’t start with an S, even though the C has the same sibilant sound. Argh! I just did it again! Make it stop!

The court didn’t even use the word “stupid” to describe the settlement, although it certainly could have. Neither did I when I informed you, also with a lot of alliteration, that the settlement had been reached. See “PLEASE TAKE NOTICE of the Short-Subway-Sandwich Settlement” (Nov. 2, 2015). I personally felt I was being quite even-handed when discussing the matter. I didn’t use, for example, the phrases “utterly worthless” or “no better than a racket.” But I certainly could have. Because the Seventh Circuit actually did.

As a reminder, this is the matter in which no fewer than nine separate class-action lawsuits were filed after it was revealed that in some instances, a Subway customer had received a “footlong” sandwich that was, in fact, slightly shorter than one foot. A settlement was reached, and a judge approved it. On Friday, the Seventh Circuit un-approved it, in an opinion that began like this:

In January 2013 an Australian teenager measured his Subway Footlong sandwich and discovered that it was only 11 inches long. He photographed the sandwich alongside a tape measure and posted the photo on his Facebook page. It went viral. Class-action litigation soon followed. Plaintiffs’ lawyers across the United States sued Subway for damages and injunctive relief under state consumer-protection laws, seeking class certification….

In their haste to file suit, however, the lawyers neglected to consider whether the claims had any merit. They did not.

Oh dear.

This is a short but devastating opinion in which the court agreed with professional class-action-settlement objector Ted Frank that the only people who benefited from this settlement were the plaintiffs’ lawyers. They argued that the settlement actually provided meaningful benefits to class members—who got no money, not even a discount coupon—because Subway was bound, “for a period of four years, to a set of procedures designed to achieve better bread-length uniformity.” As that suggests, the court was entirely unimpressed.

Before the settlement, it pointed out, in most cases consumers would get a sandwich bread loaf that was at least 12 inches long and, more importantly, would contain basically the same amount of food as any other. There was only a small chance that any sandwich loaf would be length-deprived. After the settlement, the court pointed out, “there’s still the same small chance,” because as the settlement acknowledged, it’s impossible to bake something to a particular length with scientific precision. “The injunctive relief approved by the district judge,” therefore, “is utterly worthless.”

The plaintiffs’ lawyers therefore did not deserve $525,000 for having “achieved” it, the court concluded, holding that the cases should have been dismissed instead. It quoted equally blunt language from one of its decisions last year:

A class action that “seeks only worthless benefits for the class” and “yields [only] fees for class counsel” is “no better than a racket” and “should be dismissed out of hand.” That’s an apt description of this case.

In the scheme of things, half a million bucks split between nine sets of plaintiffs’ lawyers for at least three years of work would not have been much of a payday, frankly. And yet it would have been half a million bucks too many.